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US central bank to study Facebook virtual currency

11 July 2019

Trump wrote on Twitter earlier this month, the latest in a series of unprecedented attacks on the independence of the Fed by a sitting president. And he must do this all without admitting that the Fed misread the economy when it hiked rates past year.

The Dow exploded higher after Jerome Powell hinted at an impending interest rate cut.

This means a July rate cut is nearly certain, by at least 25 basis points, maybe even more, but even James Bullard, the noted dove and St. Louis Federal Reserve President in a speech at the same time as Powell's stated that 50 basis points would be "overdone" and that a 2nd cut later in the year should be enough.

"My sense is that Powell is more concerned about global financial conditions ... than he is pacified by a strong United States labor market", said Jim Caron from Morgan Stanley Investment Management.

The bank believed that the USA telecom giant is "positioned to sustain double-digit growth" in earnings over the next five years.

"Powell's really making the case that an insurance rate cut is important so July is looking much more likely despite the fact we had a pretty good jobs report", said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance.

"Have no fear", Rep. David Scott, D-Ga., told the chairman.

Powell's remarks came ahead of two days of testimony in Congress on the economic and policy outlook.

David Marcus, Facebook's blockchain lead and the head of Calibra, a subsidiary which will build a digital wallet for the cryptocurrency, responded to some questions by the Senate Banking Committee on Tuesday.

He replied: "What I have said is the law gives me a four-year term and I fully intend to serve it". Many forecasters predict that growth has slowed to an annual rate of around 2% in the just completed April-June quarter.

According CNBC, Powell testified that "inflation has been running below the Federal Open Market Committee's symmetric 2 percent objective, and crosscurrents, such as trade tensions and concerns about global growth, have been weighing on economic activity and the outlook".

"If we had a Fed that would lower interest rates, we would be like a rocket ship", he said.

"Many FOMC participants saw that the case for a somewhat more accommodative monetary policy had strengthened".

After pricing in multiple rate cuts for 2019, Wall Street suffered a chilly weekend following the release of better-than-expected jobs data.

Despite Trump's criticism, White House economic advisor Larry Kudlow told CNBC this week Powell's position as Fed chair is safe "at the present time". Trump and Chinese President Xi Jinping declared a truce last month in what had threatened to become an escalating U.S.

This was despite last week's strong USA jobs figures and an easing of trade tensions with China.

By the end of the month, both that concern and Trump's complaints are likely to be rendered moot.

When the stock markets crash last winter amid threats of tariffs against China, Trump began to ask his advisers if he could remove Powell from his post at the central bank.

US central bank to study Facebook virtual currency